Kospi tests new highs as retailers drive bull run at the opening of the Year of Cow

[Photo by Kim Ho-young]

South Korea’s benchmark Kospi opened the Year of the Cow on a bullish note, heading for a new milestone led by unfazed retail push.

The main Kospi closed Monday at a fresh historic high of 2,944.45, up 2.47 percent from the previous session. The tech-heavy Kosdaq rose 0.95 percent to finish at 977.62.

Kospi rose 1.57 percent to finish Tuesday at 2,990.57 while Kosdaq gained 0.83 percent to 985.76.

Individual investors net bought 1.03 trillion won ($948.2 million) worth of shares on Monday, sucking up most of the 1.19 trillion won offloaded by institutions.

Experts say the country’s response to the Covid-19 outbreak would be a decisive factor for the local stock market.

“Investors have already factored in the global vaccine development into the markets since late last year,” said Chung Yong-taek, head of the research center at IBK Securities. “The Kospi could drop just as sharply as it has surged, making it crucial for Korea to effectively contain the coronavirus.”

Kospi’s total market cap as of Monday was a record 2,029 trillion won. The market has been expanding at a rapid clip. The first time the index crossed 1,000 trillion won was in September 2010. It went on to hit the 1,500 trillion won threshold in May 2017 and topped 2,000 trillion won less than four years later.

When combined with Kosdaq’s market cap of 389 trillion won, Korea’s two main stock indexes are now valued at 2,418 trillion won. The combined figure is comparable to the world’s No. 1 market cap company Apple, which was valued at 2,441 trillion won as of Dec. 31.

Retail investors on Monday net bought 1.03 trillion won in Kospi and 377.3 billion won in Kosdaq. The amount was the highest figure since Korea started compiling related data since 2001. Individuals net bought 530.5 billion won worth of shares in 2020 and 309.3 billion won in 2019.

In contrast, institutional investors net sold 1.19 trillion won on Monday.

The number of securities accounts jumped 20.7 percent in late 2020 compared with a year earlier.

The Monday rally was driven largely by semiconductors and secondary batteries.

Samsung Electronics Co., the world’s largest chip maker and the biggest Korean company by market cap, rose 2.47 percent on Monday to a record high of 83,000 won. Shares in SK Hynix Inc. gained 6.33 percent. Samsung Electronics closed Tuesday up 1.08 percent and SK Hynix up 3.57 percent.

Shares in battery giant LG Chem Ltd. closed Monday up 7.89 percent. Samsung SDI Co. gained 6.85 percent and SK Innovation Co. jumped 21.6 percent. LG Chem finished Tuesday up 0.45 percent, while Samsung SDI gained 2.24 percent and SK Innovation rose 5.63 percent.

Auto stocks also rallied. Hyundai Motor Co. finished Monday up 8.07 percent, Kia Motors Corp. 2.56 percent and Hyundai Mobis Co. 12.3 percent. Hyundai Motor closed Tuesday 0.93 percent higher and Hyundai Mobis up 1.39 percent, while Kia Motors fell 0.47 percent.

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